On Sunday, November 18, 2001, at 02:16 PM, Faustine wrote:

-----BEGIN PGP SIGNED MESSAGE----- Hash: SHA1 declan wrote:

...

Not so with digital cash. It also suffers from deployment problems, of course, but far more substantial regulatory ones. You need two consenting users -- and a tie-in to the banking system (preferable) or at least some exchange of value (like e-gold) that's sufficiently trusted. Crypto may peeve the FBI, but widespread digital cash is far more alarming to governments, which will not permit true digital cash to be deployed in any popular way. One obvious way to limit its utility is to restrict its tie-ins with the banking system, or prohibit businesses within their borders from using it. That's the crypto winter.

On a scale of 1 to 10, how likely do you think it is that these problems will be resolved in, say, the next decade? Where are the people most likely to make it happen? Fascinating stuff.

0. Can't happen, and won't. Why? there's no margin in it. RH was always going on about Digital bearer Certs being 2 orders of magnitude cheaper to clear than a book entry transaction, and he may well be right. But Citibank, AmEX and the others make their money making those transactions, and they aren't stupid people. They're not going to cut their own throats--they realize that the costs of setting up and running a clearing house for DBC/Ecash/whatever are trivial compared to running a clearing house for credit cards. And the government realizes what happens when they can no longer track the money. I used to have one thin wedge of hope, that someone with the brains, the code and the capital would realize that there could be a killing made in the Adult Entertainment side of things--porn and gambling. Areas where (1) Participants do not necessarily trust each other, (2) People often wish to be anonymous, and (3) large amounts of cash change hands. However the Porn Sites are obviously doing quite well getting True Names from people, and the people obviously don't mind much that these sites will often double charge their credit cards &etc. And the gambling people, well, they're heavily regulated. -- Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws. Plato (427-347 B.C.)